WRITING PUTS TO ACQUIRE STOCK

A strategy in which a put option is sold at an exercise price that would represent a good investment by an option writer who believes a stock's value will fall, so that the writer cannot lose. If the stock price unexpectedly goes up, the option will not be exercised and he is at least ahead the amount of the premium he received. If the stock loses value, as expected, the option will be exercised, and he has the stock at what he had earlier decided was a good buy, and he has the premium income in addition.